New York: The U.S. Federal Reserve has decided to keep interest rates steady through December, disregarding President Donald Trump’s directive to lower them.
According to official details, the Fed announced that the interest rate will remain between 4.25% and 0% until the end of the year. Fed Chair Jerome Powell emphasized that economic indicators and inflationary trends do not currently warrant a rate cut.
In its latest economic report, the Fed revealed that inflation in the U.S. is currently hovering around 3%. Despite repeated pressure from President Trump to cut interest rates, the Fed has chosen not to follow his recommendation.
Speaking at a press conference on Wednesday, Chair Powell warned that new tariffs imposed by President Trump could drive inflation higher and slow down economic growth. He cautioned that such policies might have long-term negative impacts on the economy.
According to the Fed’s updated forecasts, inflation could rise to 3% by the end of the year (currently at 2.4%), while unemployment may climb to 4.5%.
Additional decisions regarding Trump’s imposed tariffs are expected in July, as the 90-day temporary suspension period ends on July 9.
Fed officials also hinted at the possibility of two rate cuts later this year but did not specify exact dates. Analysts predict that the first cut might occur in September.
It’s worth noting that since President Trump took office in January, interest rates have remained unchanged. The last rate cut took place in December 2024, when the Fed lowered rates by 0.25 percentage points.
